SINGAPORE: Gold prices dipped in Asian trade on Monday as Covid-19 vaccine rollouts lifted riskier assets, overshadowing hopes for further US fiscal and monetary stimulus.
Spot gold fell 0.4% to $1,831.75 per ounce by 0746 GMT, while US gold futures eased 0.4% to $1,836.80.
"The euphoria around a Covid-19 vaccine will likely overshadow further easing from the Federal Reserve and a fiscal relief package in the near term," said Howie Lee, an economist at OCBC Bank.
"But gold could rally in 2021 when the vaccine optimism dies down and investors' focus returns to rising inflation expectations due to the large swathe of monetary and fiscal stimulus the US economy still requires."
The first shipments of Pfizer Inc and BioNTech SE's coronavirus vaccine in the United States began on Sunday, lifting Asian equities.
But, limiting gold's losses were reports that a $908 billion US Covid-19 relief plan could be introduced as early as Monday as a leading Democrat lawmaker suggested his party might be willing to reach a compromise.
Investors now await the US Federal Reserve's two-day policy meeting starting on Tuesday with bets for increased purchases of longer-dated Treasuries to contain a rise in yields, which also weighed on the dollar.
"Gold could rise even if a fiscal stimulus deal isn't reached as long as the Fed manages to compress yields with the collapse in negotiations ahead of the meeting, potentially necessitating more aggressive monetary action," OANDA analyst Craig Erlam said.
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